Achieving Comprehensive Hukou Reform in China

The Chinese government has repeatedly stated its commitment to pursue systematic urbanization. But in doing so, the government will have to allow migrant workers who have left rural areas for cities to become genuine urban citizens.

In addressing this challenge, Professor Chan suggests expanding current hukou reform efforts into China’s largest cities. And he makes other recommendations too, especially for how to handle the large “floating population” of migrant workers. Such a policy change will involve much more than simply altering a citizen’s hukou category from rural to urban in the registration record. Rather, it will mean allowing migrant workers to gain permanent residency in Chinese cities, and thus to be covered by the urban public service system in their place of work. In effect, China’s migrants need to become full urban residents.

Many have argued that the cost burdens associated with liberalization of the hukou system are so large that they necessitate a cautious approach to reform. But Chan looks at the other side of the ledger, viewing migrants as an asset rather than a liability. Viewed this way, he argues, concerns about cost may not be as valid as some suggest because one must also account for the dividends that will accrue from a bigger tax base comprised of newly enfranchised migrants.

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